agasti holding asa
TRANSCRIPT
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Agasti Holding ASA
4th quarter 2013Oslo, February 11th 2014
Jørgen Pleym Ulvness, Chief Executive OfficerChristian Dovland, Chief Financial Officer
Disclaimer: Unaudited Q4 and preliminary 2013
figures. This interim report contains certain
forward-looking statements that involve risks and
uncertainties. All statements other than
statements of historical facts are forward-looking
statements and must not be understood as
guarantees for the future.
2
Agenda
• The positive trend continues
• Interim financial statements
• Outlook
The positive trend continues
Jørgen Pleym Ulvness, Chief Executive Officer
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3
Challenging strategic goals at the end of 2012
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0
10
20
30
40
50
60
70
80
2009 2010 2011 2012
Assets under Management
Year 2009 2010 2011 2012
Operating earnings
-36 -27 -71 -56
EBITDA -9 -5 -43 -33
Delivering on strategic ambitions
6
50
55
60
4Q12 1Q13 2Q13 3Q13 4Q13
Assets under Management
Year 2012 2013 ∆
Operating earnings
-56 18 74
EBITDA -33 37 69
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Operating earnings improving
7
-36
-27
-71
-56
18
-9-5
-43
-33
37
-80
-60
-40
-20
0
20
40
60
EBIT2009
EBIT2010
EBIT2011
EBIT2012
EBIT2013 -
EBITDA2009
EBITDA2010
EBITDA2011
EBITDA2012
EBITDA2013
NOK 37 MILLION
in EBITDA in 2013
Stock returns
2013 2012-2013
AGA 36 % 55 %
OSEBX 24 % 43 %
Subscriptions
• Gross subscriptions on product level of NOK 1,050 million, of which NOK 1,022
million through advisory concepts
Gross subscriptions (mnok) Gross subscriptions per asset class (%)
388 401
590480
805
160 155
162
151
245
548 556
752
631
1 050
0
250
500
750
1 000
4Q12 1Q13 2Q13 3Q13 4Q13
Norway Sweden
67%77%
60%
44%
21%
35%3%
3%
16%
16%12% 14%
8%7% 3%5%
0%
50%
100%
4Q13 4Q12 2013 2012
Equity and Fixed Income funds Equity funds
Fixed Income funds Unit Linked
Real estate Private Equity
Other
8
5
Excellent client returns in 2013
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• Real estate yielded 19.9 % returns in 2013
• Client investments in “core” equity fund selection yielded returns of 20.5 % in 2013
• Client investments in “spicy” equity fund selection yielded returns of 15.8 % in 2013
Equity under Management (bnok)
0,7 0,7
1,7
4,5
23,7
30,0
20
25
30
4Q12 4Q13
Client return
New business
Net depositsfrom clients
Payments toclients
EuM 4Q12
Equity under Management
• Very strong development in Equity under Management with an increase of NOK 1.9
billion in the quarter and NOK 6.2 billion in 2013
Equity under Management* Equity under Management per asset class*
13 15 15 16 17
1012 12
1313
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26 2728
30
0
10
20
30
4Q12 1Q13 2Q13 3Q13 4Q13
Norway Sweden
2 2
161
22
3 1
Equity funds Fixed Income funds Real estate
Shipping Private Equity Infrastructure
Unit Linked Other
* Billion NOK 10
6
40
45
50
55
60
65
70
75
80
85
2006 2007 2008 2009 2010 2011 2012 2013 2014 jan
KTI Banker vs Navigea
Danske Bank
DNB
Eika Gruppen
Handelsbanken
Nordea
Skandiabanken
Sparebank 1 gruppen
Sparebanken Sor
Sparebaken Vest
Navigea
Customer satisfaction index
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CSI Banks vs Navigea Securities
Source: Ratingbyrået EPSI
What does it take to create a dynamic investment management business?
Increased liquidity through institutional investors, improved secondary market and payments to existing
clients
53 BNOK
Static and based on the "hold-to-maturity" vs. dynamic integrated investment management
Parts in the turnaround operation
• Ensure the best possible management of the direct investment in real estate, energy, PE + Infrastructure / Alternative investments
• Necessary resource centre to raise institutional capital
• Need for re-established strategy of investment portfolios
• Individual investment advisory• Advisor to the shareholders of the
managed structures • Restructuring for increased liquidity • Crucial with continuity and trust • Segment in strong growth • Ambition to build institutional advisory
capacity
• Facilitation abilities are essential for the creation of new structures and the restructuring of existing
• Raising new capital through brokerage • Refinancing capacity for investment
portfolios • Driving force for the creation of new
suitable structures
Obligo and AgastiWunderlich
Navigeaand Navexa
• Dynamics also ensures clients more possibilities and better liquidity, but requires an integrated platform
• Dynamics also ensures clients more possibilities and better liquidity, but requires an integrated platform
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The effects of a dynamic investment management business - Obligo
53 BNOK 45 BNOK
The nature of a "hold-to-maturity" strategyDynamic investment management of an
integrated platform
EffectsEffects
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Improved ratios
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0%
50%
100%
2008 2009 2010 2011 2012 2013
Recurring revenues / fixed and activity-based costs
0%
50%
100%
150%
2013
Recurring revenues / fixed
costs
8
Continuing restructuring of WM1Q12 3Q12 3Q13
Restructuring and implementation
Employees taken over from Acta
Asset Management
50 000 contacts
with clients
Introduction to Navigeas
serviceconcepts
Training of Wealth
Management
Compliance precontrol of
over 500 cases
New Head of Compliance,
Risk and Legal
New salary model
implemented
Risk-based Control Plan
Raising Competence in the organization
Compliance Roadshow part 1
Compliance Roadshow part 2
Compliance Roadshow part 3 Execute
Strategic changesCustodian
Services taken over from Acta
Asset Management
Notification of site inspection
FSA
One to one compliance guiding
and training
Cost Focus
Downsized staff based on
evaluation
On site inspection of
FSA
Strategy Process; 6 project groups Delivery of sub-conclusions
Risk-based and efficient compliance controls
New internal guidelines and
processes
Numerous controls
New CEO
Extensive training of all employees
New suitability
test and new procedures
The list is non-exhaustive
Corporate and secondary trading desk
transferred to Agasti Wunderlich Capital
Markets
New web pageMAP
Completed nearly 24 000 client meetings
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Strong research competence and fund selection
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Jens Morten WembstadNew
Chief Investment Strategist
• Strengthening Navigeas expertise
in macro and analysis
• Focus on portfolios of unlisted
investments
• Contribute to high quality service
delivery and value creation for the
customers
• Further strengthen Navigeas
advisory concept based on
competence, credibility and
confidence
Ann-Elisabeth Tunli MoeInvestment director and head of
fund selection
• Exclusive selection of quality
funds
• Comprehensive selection process
(TRIP Check)
• Active market outlook
• Experienced team for fund
selection
• Excellent track record
• Alfred Berg • Gjensidige NOR• Industrifinans • Forvaltning• Danske Invest
• KLP• Gjensidige
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Agasti with strategic client agreementwith Griff Kapital AS
• Agasti has signed a strategic client agreement and business cooperation with Griff Kapital
AS (“Griff”)
• Griff is a highly reputable investment advisor founded, owned and managed by Morten
Christensen and Jaran Sørebø. Griff targets institutional clients, primarily within pension
and life insurance as well as large family offices and foundations
• Griff will support our Wealth Management activities and further enhance our value adding
investment advisory business
• Griff will provide continuous investment advice and asset allocation evaluations to
strengthen Navigea’s existing value chain of investment advisory
• Further, Griff will evaluate and provide thematic investment analysis as well as allocation
advice and advice regarding new investment cases
New CFO – Christian Dovland
• Christian Dovland appointed CFO for the Agasti Group with effect from today
• Previously Senior Director at Obligo Investment Management; Christian is well
known with Agasti’s strategic platform and ambitions
• Extensive capital markets experience and from various roles within business and
finance, amongst other from Arthur Andersen, Controller and Investment
Director at Stormbull AS and CFO of Nesthood International ASA
• Christian worked more than 11 years with corporate finance in Swedbank First
Securites
• Responsible for Private Equity, Infrastructure and Renewable Energy
investments in Obligo with AUM of more than NOK 5 billion
• Education; Siviløkonom, MBA, MA from Heriot-Watt University and Monterey
Institute of International Studies
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Interim financial statements
Christian Dovland, Chief Financial Officer
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Key financial data
* After tax 20
• Substantial increase in revenues mainly related to insourcing of investment mandates and increased transaction activity
• Scalable business model
• Operating earnings increased by NOK 74 million Vs 2012
• Strategic ambition for recurring revenues to cover both fixed and activity-based costs on an annual basis achieved
4Q 4Q prelim.
mnok 2013 2012 2013 2012
Transaction revenues 28 11 59 29
Recurring revenues 96 74 362 337
Total revenues 124 86 421 366
Variable operating costs 12 8 23 38
Activity based costs 18 18 63 88
Fixed costs 80 65 298 272
EBITDA 14 -5 37 -33
Depreciation a.o. 4 6 18 24
Operating earnings 10 -12 18 -56
Net income before tax 14 -15 25 -60
Net income 8 -15 16 -54
EPS 0.03 -0.06 0.06 -0.21
ROE* - annualised 13% -31% 8% -26%
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Balance sheet
• The Agasti Group has a robust financial position
• Bank deposits of NOK 142 million
• Capital base significantly strengthened through share issues of NOK 43.5 million in total
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mnok 31.12.13 31.12.12
Goodwill 51 9
Other intangible assets 30 35
Deferred tax asset 44 50
Total intangible assets 125 93
Fixed assets 7 8
Financial assets 15 14
Total tangible assets 23 22
Financial current assets 44 32
Trade receivables 40 12
Other receivables 52 44
Bank deposits 142 135
Total assets 425 339
Equity 249 184
Long term debt 35 0
Accounts payable 14 7
Taxes payable 1 0
Overdraft facility 11 21
Other taxes and duties payable 17 18
Salaries/commissions payable 28 29
Other short term debt 70 79
Total debt 176 154
Total equity and debt 425 339
Outlook
Jørgen Pleym Ulvness, Chief Executive Officer
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Strong traction on new platform
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Operating earnings improvingOperating earnings improving
Growth in advisory accountsGrowth in advisory accounts
mNOK
Equity under Management (bNOK)Equity under Management (bNOK)
NOK 1,550 MILLION* in new equity in advisory concepts
NOK 1,550 MILLION* in new equity in advisory concepts
Building a strong secondary marketBuilding a strong secondary market
NOK 700 MILLION* in secondary brokerage transactions
NOK 700 MILLION* in secondary brokerage transactions
bNOK
* 2013
13 15 15 16 17
1012 12 13
1324
26 27 2830
0
10
20
30
4Q12 1Q13 2Q13 3Q13 4Q13
Norway Sweden
-36-27
-71-56
18
-9 -5
-43-33
37
-80
-60
-40
-20
0
20
40
60EBIT2009
EBIT2010
EBIT2011
EBIT2012
EBIT2013 -
EBITDA2009
EBITDA2010
EBITDA2011
EBITDA2012
EBITDA2013
Delivering on strategic goals
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Profitable operations in 2013
Recurring revenues to cover both fixed and activity based cost
Work hard for clients
Establish one of the most competent professional environments within our sectors
Attract institutional capital from investors outside Scandinavia
Compete for attractive mandates both in corporate finance and investment management
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Acquisition Summary
Year Built 2000-2002
No. Buildings 5
No. Units 96
Land Area 7,309 sq m
Lettable Area 4,612 sq m
Occupancy 100% (Master Lease)
Purchase Price £11,280,000
Disc. to VPV 14%
Gross Rent £866,340
Gross Yield 7.50%
Acquisition Update
The newly established UK Housing fund has made its first acquisition in London for NOK 111.5 million
representing an approximate 14% discount to appraised value
First acquisition comprises 96 flats, fully let to a London local government
Implied gross yield at acquisition of ca 7.5%. Net payment to investors in year 1 targeted at 7% paid out
quarterly
Structure Highlights
The fund, which had its first soft close in December 2013, is already fully deployed toward the largest asset
identified in the initial pipeline
Management fee of 2% of quarterly NAV
In addition to fees, Obligo establishing track record as first entrant in this arena with institutional investor
backing. Property manager tie-in creates high barrier to entry
Investment banks, insurance companies and Islamic lenders are being approached for financing
Saudi investor confident of more equity contribution on the back of first successful dividend distribution
(expected H1-2014). Various other equity investors looking for transaction execution before committing
The structure was selected amongst over 100 global structures as a top-5 finalist of most innovative Sharia
compliant structures by Thompson Reuters & Abu Dhabi Investment Bank in Q4 2013
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UK Housing fund successfully established
Real Estate
Fund-selection
EnergyShipping
P/EInfra-stru
cture
Agasti is focused on three main sectors & third party fund selection
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Real estateAUM $6.3b
Energy and MaritimeAUM $0.8b
Private Equity & InfraAUM $1b
Third party fund selectionAUM $1.4b
Investment managementRecruited approx. 40 highly skilled professionals and created a world class investment
management environment
FacilitationTeam of 12 in place with broad and extensive experience in real estate, shipping and
oil service
Brokerage Advisory
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Contact information:
• Head of IR, Jo-Inge Fisketjøn
• Phone: +47 21 00 33 49
• E-mail: [email protected]
• www.agasti.no
Q & A